Why Do Most Online Shoppers in Russia Still Pay in Cash?

Last year, it’s estimated that Russians spent about $8.5 billion shopping online. Not bad, until you compare it to the $32 billion Americans spent on the web in 2010 — and that’s just from November to December alone. Part of the e-commerce discrepancy appears to be a fundamental difference in how the culture thinks; the short story is that Russian shoppers haven’t yet learned to fully trust the Internet to handle their transactions.

In a report by the BBC, they estimate that 80% of the transactions that take place through Ozon.ru — a premiere online megaseller similar to Amazon — are made in old-fashioned cash. Consumers “buy” their products online, but then have to go pick the package up, inspect it, and pay for it. To a Western consumer, that whole idea seems to defeat many of the reasons we’d choose (and often prefer) to buy our goods online: wider product selections; no pushy salespeople and their commission-forced grins; none of that “going outside” thing — and the list goes on.

“It takes years [after you start using the internet] before you start shopping online,” Ozon.ru director general Maelle Gavet tells the BBC. Gavet’s retail company is trying to change Russia’s shopping conscience. For starters, they’re offering discounts and similar promotions to erase consumers’ bad memories (lots of online retailers opened and closed before they’d had a chance to ship orders, leaving customers out of luck). Then, they’re setting up 24/7 call centers to help assure buyers that there’s an actual, breathing human somewhere on the other end of the transaction.

But one of the more daunting challenges has been Russia’s lack of a national delivery system, “unlike Amazon who had an amazing chance to have UPS when they started, and the American post,” according to Ms. Gavet. As a result, the company was forced to spend large amounts of capital in order to develop an infrastructure that’d allow people to get receive their goods.

The market upside, however, is huge. According to Data Insight, a Russian research agency, online retailing is predicted to jump 120% in the next five years.